Exhibit 10.4
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EMPLOYMENT AGREEMENT
AGREEMENT made this 30th day of October, 1996, by and
between Xxxxxxx-Xxxxxx AG (the "Company"), and Xxxxxx X. Xxxxxxx
(the "Executive").
The Executive is presently employed as President of the
Group Management Committee and as Chief Executive Officer and
President of the Company.
The Board of Directors of the Company (the "Board")
recognizes that the Executive's contribution to the growth and
success of the Company has been substantial. The Board desires to
provide for the continued employment of the Executive and to make
certain changes in the Executive's employment arrangements with
the Company which the Board has determined will reinforce and
encourage the continued attention and dedication to the Company
of the Executive as a member of the Company's management, in the
best interest of the Company and its shareholders. The Executive
is willing to commit himself to continue to serve the Company, on
the terms and conditions herein provided.
In order to effect the foregoing, the Company and the
Executive wish to enter into an employment agreement on the terms
and conditions set forth below. Accordingly, in consideration of
the premises and the respective covenants and agreements of the
parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT.
The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to serve
the Company, on the terms and conditions set forth herein.
SECTION 2. TERM.
This Agreement enters into force as of October 15,
1996. It is of unlimited duration.
SECTION 3. POSITION AND DUTIES.
During the Term, the Executive shall (i) serve as
President of the Company and shall have such responsibilities,
duties and authority as he may have as of the date hereof (or any
position to which he may be promoted after the date hereof) and
as may from time to time be assigned to the Executive by the
Board that are consistent with such responsibilities, duties and
authority and (ii) be appointed to serve as a member of the board
of directors of MT Investors Inc., of which the Company is an
indirect wholly owned subsidiary.
SECTION 4. PLACE OF PERFORMANCE.
In connection with the Executive's employment by the
Company, the Executive shall be based at the principal executive
offices of the Company in Greifensee, Switzerland, except for
required travel on the Company's business to an extent
substantially consistent with present business travel
obligations.
SECTION 5. COMPENSATION AND RELATED MATTERS.
(a) SALARY.
During the Term, the Company shall pay to the Executive
an annual base salary at a rate of CHF 560'000.-- or such higher
rate as may from time to time be determined by the Board, such
salary to be paid in substantially equal installments in
accordance with the Company's payroll practices for its senior
executives. This salary may be increased from time to time in
accordance with normal business practices of the Company.
Compensation of the Executive by salary payments shall not be
deemed exclusive and shall not prevent the Executive from
participating in any other compensation or benefit plan of the
Company. The salary payments (including any increased salary
payments) hereunder shall not in any way limit or reduce any
other obligation of the Company hereunder, and no other
compensation, benefit or payment hereunder shall in any way limit
or reduce the obligation of the Company to pay the Executive's
salary hereunder. While a loan (as evidenced by a Loan Agreement
between the Company and the Executive entered into on the date
hereof) from the Company to the Executive is outstanding, the
Executive shall be entitled to additional annual compensation
(which is currently estimated at CHF 52'525.--) such additional
compensation to be paid in substantially equal monthly
installments and representing the amount necessary, after payment
of all taxes and social security contributions thereon, to fully
offset the interest charged to the Executive on such loan.
(b) BONUS.
During the Term, the Executive shall be entitled to
earn annual incentive compensation in accordance with the POBS
Plus Plan for Senior Management, as attached hereto as Exhibit
A1; provided, however, that for calendar year 1996, the Executive
shall be entitled to earn transition incentive compensation based
one-half upon the POBS Plan and one-half upon the POBS Plus plan.
(c) EXPENSES.
(i) Expenses shall be reimbursed according to the
Company expense regulations as amended from time to time.
(ii)In addition the Executive is entitled to flat
compensation for minor expenses according to the Group Management
Committee Supplement to the expense regulations, as amended from
time to time.
(d) OTHER BENEFITS.
(i) The Company shall maintain in full force and
effect, and the Executive shall be entitled to continue to
participate in, all of the Company's insurance benefit plans and
arrangements in effect on the date hereof in which the Executive
participates or plans or arrangements providing the Executive
with at least equivalent benefits thereunder (including, without
limitation, the Xxxxxxx-Xxxxxx Fonds pension scheme for senior
management, and the Company's accident plan and disability plan),
provided that the Company shall not make any changes in such
plans or arrangements that would adversely affect the Executive's
rights or benefits thereunder; provided, however, that, such a
change may be made, including termination of such plans or
arrangements if it occurs pursuant to a program applicable to all
executives of the Company and does not result in a
proportionately greater reduction in the rights of or benefits to
the Executive as compared with any other executive of the
Company. The Executive shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement
made available by the Company in the future to its executives and
key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such
plans and arrangements. Nothing paid to the Executive under any
plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to the
Executive pursuant to paragraph (a) of this Section.
(ii)The Executive shall be entitled to
participation in the (x) Xxxxxxx-Xxxxxx Group Management
Committee Stock Purchase Plan, and (y) the Xxxxxxx-Xxxxxx
Management Share Option Plan of 1996, each as may be amended from
time to time.
(iii) Any payments or benefits payable to the
Executive under this Agreement in respect of any calendar year
during which the Executive is employed by the Company for less
than the entire such year shall, unless otherwise provided in the
applicable plan or arrangement, be prorated in accordance with
the number of full and partial months in such calendar year
during which he is so employed.
(e) VACATIONS.
The Executive shall be entitled to no less than 30 paid
vacation days in each calendar year. The Executive shall also be
entitled to all paid holidays and personal days given by the
Company to its executives.
(f) SERVICES FURNISHED.
The Company shall furnish the Executive with office
space, stenographic assistance and such other facilities and
services, including communications and other equipment for home
office use, as shall be suitable to the Executive's position and
adequate for the performance of his duties as set forth in
Section 3 hereof.
(g) COMPANY CAR.
The Executive shall be provided with the company car
that he has been provided with by the Company as of the date
hereof (or a similar car as a replacement therefor) and the
Company shall promptly pay, or reimburse the Executive, for all
expenses associated therewith, in accordance with rules in effect
for the Company's senior management.
SECTION 6. OFFICES.
Subject to Sections 3 and 4, the Executive agrees to
serve without additional compensation, if elected or appointed
thereto, as a director of the Company and any of its subsidiaries
and / or parent companies, and in one or more executive offices
of any of the Company's subsidiaries and / or parent companies,
provided that the Executive is indemnified for serving in any and
all such capacities on a basis no less favorable than is
currently provided by the Company to any other director of the
Company or any of its subsidiaries and / or parent companies.
SECTION 7. TERMINATION.
(a) This Agreement may be terminated by either party
with or without cause giving thirty-six (36) months notice to the
end of a calendar month, subject, however, to the provisions
allowing for immediate termination according to Article 337 of
the Swiss Code of Obligations ("Article 337").
(b) The Executive may terminate his employment under
Article 337 in case of failure by the Company to comply with any
material provision of this Agreement, including (but not limited
to) the Executive's relocation without his consent to a location
other than Greifensee, Switzerland or the Company failing to
appoint (or reappoint) the Executive to the board of directors of
MT Investors Inc.
SECTION 8. COMPENSATION UPON TERMINATION.
During the notice period, the Executive is entitled to
full compensation as defined in Section 5 of this Agreement and
in the annexes / exhibits therein referred to.
SECTION 9. NO MITIGATION OR OFFSET / NONCOMPETITION.
During notice periods, the Company may waive the
services of the Executive. If the Company so decides, the
Executive shall have no duty to mitigate damages by seeking
another employment or otherwise, nor shall the amount of any
payment or benefit due under Section 5 be reduced by any
compensation earned by the Executive as the result of an
employment by another employer, by retirement benefits (other
than as paid by the Company or under Company benefits schemes) or
by offset against any amount claimed to be owed by the Executive
to the Company. The Company shall have no right at any time to
offset any unpaid portion of the loan referenced in Section 5(a)
of this Agreement against any amount owing by the Company to the
Executive hereunder. While the Executive is employed by the
Company hereunder and for a period of twenty-four (24) months
after the termination of the Executive's employment, the
Executive shall not knowingly engage in or be employed by any
business anywhere in the world which competes with the principal
businesses of the Company or its affiliates as conducted at the
date of such employment termination.
SECTION 10. SUCCESSORS; BINDING AGREEMENT.
(a) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and / or
assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in same manner and to the same extent that
the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and
on the same terms as he would be entitled to under Sections 7 and
8 hereof if the Company had terminated his employment under
Section 7(a) hereof. As used in this Agreement, "Company" shall
mean the Company as herein before defined and any successor to
its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 11 or which
otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(b) If the Executive should die after the giving of
notice pursuant to Section 7 but while any amounts would still be
payable to him hereunder if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate. If the Executive should die
before the giving of such notice under Section 7 and while he is
employed pursuant to this Agreement, the Company shall continue
to pay to the Executive's estate his salary for the period of six
months from the date of such death and a pro rata portion of the
bonus, if any, payable for the year in which the Executive died.
SECTION 11. NOTICE.
For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or (unless otherwise specified) mailed by US or Swiss
certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Xxxxxxxxx 00
0000 Xxxxxxxxxx
Xxxxxxxxxxx
If to the Company:
Xx Xxxxxxxxx
0000 Xxxxxxxxxx
Xxxxxxxxxxx
Attn.: Corporate Secretary
with Copy to
Xxxxxx X. Xxxxxx
c/o AEA Investors Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address as any party may have furnished to the
others in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
SECTION 12. MISCELLANEOUS.
No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer of
the Company as may be specifically designated by the Board. No
waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made
by either party which are not set forth expressly in this
Agreement. Insofar as this Agreement does not stipulate anything
else to the contrary, the General Rules of Employment
("Allgemeine Arbeitsvertragliche Bestimmungen / AVB") of the
Company shall be applicable. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of Switzerland.
SECTION 13. VALIDITY.
The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
SECTION 14. COUNTERPARTS.
This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same
instrument.
SECTION 15. DISPUTES.
All disputes between the Executive and the Company
concerning the terms and conditions of this Agreement shall be
brought before the ordinary courts in the Canton of Zurich,
Switzerland.
SECTION 16. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein
and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or
representative of any party hereto; and any prior agreement of
the parties hereto in respect of the subject matter contained
herein is hereby terminated and canceled.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the date and year first above written.
Xxxxxxx-Xxxxxx AG,
By:/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Human Resources
By:/s/ Xxxxxxxxx Xxx
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Xxxxxxxxx Xxx
Finance and Control
By:/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Attest:
By:/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
